Tesla is in a bubble and it’s ‘going down,’ top fund manager says

Tesla CEO Elon Musk speaks at a shipping and delivery ceremony for Tesla China-produced Model 3 in Shanghai, east China, Jan. 7, 2020.

Ding Ting | Xinhua News Agency | Getty Pictures

Shares of the electric powered motor vehicle maker Tesla are likely to see sharp falls as curiosity charges improve immediately after the coronavirus crisis, Lansdowne Associates fund manager Per Lekander advised CNBC.

Lekander instructed CNBC’s “Squawk Box Europe” Tuesday that he thinks Tesla is in a bubble and that he is short on Elon Musk’s agency, indicating he will revenue if the price of Tesla’s inventory falls.

Tesla’s industry price soared to more than $800 billion in the 12 months leading up to January, ahead of dropping to much less than $600 billion in February. It now stands at around $679 billion.

“My consider is that this year is heading to be the comeback for the incumbents,” said Lekander, contacting out German carmaker Volkswagen, which is valued at 119 billion euros ($141 billion), as one business he is significantly bullish on.

“There are a handful of golden nuggets, which I believe are heading to be extensive-term winners. But in the shorter term, my guess if I’m appropriate on the macro phone that interest rates go up and the sector wakes up to (the actuality that) the incumbents are not as poorly positioned as they consider, then indeed, I believe Tesla is likely down.”

Some other sector watchers will very likely disagree with that prediction. Wedbush analyst Dan Ives, for illustration, thinks Tesla’s shares will get better after a volatile commence to the yr.

“Tesla’s results ramping its EV (electrical car or truck) initiatives and demand in China for the thirty day period of March that will catalyze shares greater following a shaky January and a strong thirty day period of February,” reported Ives in a be aware on Monday.

Tesla did not immediately respond to a CNBC request for comment.

Lekander drew comparisons to the dot-com increase of 1999.

“If you feel about the visionaries who talked about the internet in 1999, if you now pay attention to them, they are in fact underestimating what occurred,” he said. “The enhancement was even extra radical than what occurred.”

He pointed out that Cisco — arguably a poster kid for that period of time — has a much larger market worth currently than it experienced in 2000.  “It didn’t halt it from heading down 80% to start with,” he claimed.

The equivalent in Europe was almost certainly Nokia, Lekander additional, stating that it also went down 80%.

“I assume that is what we are likely to see in this article in this tech spec hoopla area,” he explained.

Tesla stock snapshot

Tesla’s ‘Technoking’

Past thirty day period, Tesla exposed that it had acquired $1.5 billion truly worth of bitcoin. Tech investigation business Wedbush believes that the company has already built a $1.2 billion earnings on its financial investment.

Tesla officially gave CEO Musk the title of “Technoking of Tesla” in a new regulatory submitting on Monday.

Musk will keep his placement as chief government officer, Tesla said. Zach Kirkhorn, the firm’s main financial officer, has also been offered a new title: “Learn of Coin.”

“We consider this hints at Musk viewing Tesla additional as a technological know-how disruptor in the long term in particular with robotaxis, FSD (full self-driving), and substantial battery know-how developments on the horizon at Tesla,” said Ives.